1

DO: Always Set a Stop-Loss Before You Enter

This is rule number one and it’s not negotiable. Before I click the buy or sell button, I know exactly at what price I’m willing to accept the loss and walk away. Not after I’m in. Not “I’ll set it in a minute.” Before the position exists. A stop-loss isn’t pessimism — it’s the difference between a bad trade and a catastrophic one.

On Hyperliquid, set it as a Stop Market order so it executes immediately at your trigger price. Set it at the same time as your entry order — make it a two-step habit that becomes one fluid action. If you can’t define where you’re wrong before entering, you’re not ready to be in the trade.

2

DO: Use Isolated Margin by Default

Isolated margin caps your maximum loss at what you assign to that one position. Cross margin pools your entire account — meaning one bad trade can drain everything. I use isolated margin on every speculative trade. The slight improvement in liquidation price that cross margin offers is not worth the risk of one losing position cascading into my whole account.

Think of it this way: in isolated mode, a liquidation is painful. In cross mode, a liquidation can be terminal. Default to isolated. Change to cross only when you have a specific, well-understood reason to do so.

3

DO: Check the Funding Rate Before Every Position

The funding rate is one of the most underused pieces of information available on Hyperliquid. Before I open any position I plan to hold for more than a few hours, I look at the current funding rate and what direction it’s running. If I’m going long into a +0.05% funding rate, I’m paying $15/day per $10K of position size just to hold it — and that math works against me fast on a leveraged trade.

The funding rate also tells me how crowded a trade is. Extreme positive funding means everyone is long. Extreme negative means everyone is short. Both are signals, not just costs. I treat the funding rate as a pre-trade checklist item — it takes five seconds to look and can save me from walking into a deteriorating situation.

4

DO: Use Limit Orders to Enter — Earn the Maker Rebate

Hyperliquid charges a 0.045% taker fee when you use a market order. But when you use a limit order and it gets filled (adding liquidity to the order book), you earn a −0.01% maker rebate. On a $10,000 position, that’s a swing of $5.50 per entry. On 10 trades a month, that’s $55 per month in fees you either pay or earn — simply based on how you enter.

I set limit orders slightly below current price on longs, slightly above on shorts, and wait for the fill. Most of the time the fill comes within seconds to minutes. The only time I use a market order is when speed is genuinely critical — a breakout entry or a fast-moving liquidation scenario. For planned entries, limit orders always.

5

DO: Know Your Liquidation Price Before You Click Buy

Hyperliquid shows you your estimated liquidation price in the order panel before you confirm a trade. I always look at this number and ask myself: is that a price I think the market could realistically reach? If the answer is yes — even with some probability — I either reduce the leverage or increase the margin to push the liquidation price further away. If the liquidation price is close to current market price, the leverage is too high for the trade I’m planning.

The goal is never to see your liquidation price in your positions panel and think “that feels comfortable.” The goal is to set a stop-loss that kicks in well before you’d ever get there.

6

DO: Size Positions to Your Real Risk Tolerance — Not Your Ambition

The rule I use: never risk more than 2% of my total trading capital on a single trade. If I have $5,000 in my Hyperliquid account, the most I’m willing to lose on any one position is $100. That means if my stop-loss is 5% below entry, my position size is $2,000 (because 5% of $2,000 = $100). Simple math. Non-negotiable rule.

Most traders size by gut feel and how excited they are about a setup. I size by math. “This looks like a great trade” is not a position sizing strategy. If the setup is good, you don’t need to bet the house on it to make meaningful returns. If the setup is wrong, the math keeps you alive to trade the next one.

7

DO: Put Idle USDC to Work in HLP

Any USDC sitting in my Hyperliquid account that I’m not actively using for positions is opportunity cost. The HLP vault earns 15–30% APR by providing liquidity to Hyperliquid’s market-making operations — and it’s denominated in USDC, so there’s no price exposure to worry about. I’m not betting on an asset going up. I’m earning yield from trading activity on the platform regardless of direction.

My setup: I keep my active trading allocation in my main account and deposit the rest of my on-platform capital into HLP. The 4-day unlock window is short enough that I can get it back quickly if I want to scale into a position. Idle money is losing money in a world where 15–30% APR exists on the same platform you’re already using.

8

DO: Wait at Least 30 Minutes After a Loss Before Re-Entering

This one is psychological but it might be the most valuable rule on this list. The trade you make in the 30 minutes after getting stopped out or liquidated is almost always your worst trade of the day. The emotional state after a loss — the urge to immediately get it back, the frustration, the second-guessing — is not a state that makes good decisions. I know this from experience. I have the trade history to prove it.

My rule: after any loss that triggers my stop, I close Hyperliquid for 30 minutes minimum. I go for a walk, make coffee, do something that has nothing to do with charts. When I come back, if the setup still makes sense with a clear head, I consider re-entering. Usually I find the urgency has passed — and that’s the point. Urgency in trading is almost always a warning sign, not a green light.

9

DO: Use a Trailing Stop When a Trade Is Working

Once a trade moves in my favour by a meaningful amount, I switch from a fixed stop-loss to a trailing stop. A trailing stop follows the price up as it rises, locking in progressively more profit while still leaving room for the move to continue. On Hyperliquid, trailing stops are built into the platform — no manual adjustment needed.

The biggest mistake I made early on was closing winning positions too early because I was nervous about giving back gains. A trailing stop removes that decision from my hands. Price keeps running? I stay in and profit accumulates. Price reverses? I exit automatically at my trailing level with gains locked in. Let the market tell you when to exit, not your nerves.

10

DO: Treat Every Trade as a Tuition Payment — Win or Lose

The best traders I’ve observed don’t think in terms of “winning” and “losing” on individual trades. They think in terms of execution quality and process. Did I follow my rules? Did I set the stop before entering? Did I size correctly? If yes — the trade was a good trade regardless of outcome, because outcomes over a single trade are partly random. Process over a thousand trades is where edge shows up.

A losing trade where I followed every rule is less concerning to me than a winning trade where I got lucky and ignored my rules. The lucky win teaches bad habits. The disciplined loss teaches the process. I review both with the same question: did I execute the plan? That mental shift — from outcome-focused to process-focused — changed my trading more than any indicator or strategy ever did.

1

DON’T: Enter a Position Without a Written Stop Price

“I’ll set the stop once I see where it goes” is how liquidations happen. By the time the market is moving against you fast, the emotional pressure to not set the stop — to “give it more room” — is overwhelming. The stop needs to exist before the position does. If you can’t decide where your stop is before entering, you haven’t done enough thinking about the trade. Don’t enter. Come back when you have a clear level.

2

DON’T: Use Cross Margin on Speculative or Leveraged Trades

Cross margin is useful for specific hedging scenarios where you understand exactly what you’re doing. It is not a tool for making your liquidation price slightly better on a speculative altcoin long. I’ve seen traders use cross margin because they heard it gives “more room” — which it does, right up until it wipes everything simultaneously. Use isolated margin on speculative positions. Full stop.

3

DON’T: Ignore Extreme Funding Rates

A funding rate above +0.05% per 8 hours is a flashing yellow light. It means the market is heavily long, you’re paying a significant premium to hold that position, and you’re in the most crowded trade available. That doesn’t mean you can’t be long — it means you need to be aware that you’re paying to be popular, and the popular trade unwinds fast when sentiment shifts. I’ve entered longs into 0.1% funding rates and watched the position get eaten alive by the daily cost before the price even moved. Check the rate. Price it into your thesis.

4

DON’T: Pay Taker Fees on Every Entry When You Don’t Have To

Market orders are convenient. They are also the more expensive option on Hyperliquid by a factor that adds up significantly over time. If you’re trading 10 times a month with average $5,000 position sizes, the difference between always using market orders vs always using limit orders is roughly $27.50/month. Over a year that’s $330 in fees — just from how you enter. Use limit orders. Set them just inside the spread and let them fill. The patience pays for itself.

5

DON’T: Use Leverage You Couldn’t Survive Being Wrong With

I see people talk about 50x leverage on Hyperliquid like it’s a feature rather than a loaded weapon. At 50x, a 2% move against you wipes your position entirely. BTC moves 2% in minutes. Altcoins move 2% in seconds. The only traders who use very high leverage successfully are either algorithmic scalpers holding positions for seconds or people who are about to learn an expensive lesson.

My default for BTC is 3–5x. For altcoins, rarely above 3x. That keeps my liquidation price far enough away that normal market volatility doesn’t end my trade before it has a chance to work. High leverage feels like it increases your upside — and it does, until the first time the market disagrees with you.

6

DON’T: Trade With Money You Cannot Afford to Lose

This isn’t a cliché disclaimer. It’s practical advice for your trading performance. When you’re trading with money you genuinely need — rent, bills, emergency fund — you cannot make rational trading decisions. Every adverse tick creates genuine financial anxiety that changes your behaviour: you close winners too early, you hold losers too long hoping for a recovery, you don’t set stops because you can’t accept the loss as real. Trading with scared money makes you a worse trader. Only use capital you have designated as risk capital and can emotionally afford to have go to zero.

7

DON’T: Let Idle USDC Sit Doing Nothing

The flip side of DO #7. I see people keep significant USDC balances sitting idle in their Hyperliquid wallet “in case a good trade comes up.” That’s a reasonable instinct, but on Hyperliquid you don’t have to choose between being ready to trade and earning yield. The HLP vault has a 4-day unlock — short enough to plan around. Sitting on $10,000 of idle USDC earning 0% when you could be earning 15–30% APR is a quiet tax on your portfolio. Put it to work between trades.

8

DON’T: Revenge Trade After a Loss

Revenge trading is the act of immediately re-entering a bigger position after a loss to try to get the money back in the same session. It is the single most common way that traders turn a $200 loss into a $1,000 loss. The market doesn’t owe you a recovery. It doesn’t know or care that you just got stopped out. Entering a trade to recover from the previous one is entering for the wrong reason — emotion, not analysis. The 30-minute rule from DO #8 exists specifically to break this pattern.

9

DON’T: Manually Close Winning Positions Out of Nervousness

This is the mirror image of revenge trading — instead of overreacting to losses, you underreact to wins. You get 3% profit on a trade and close it because you’re scared of giving it back. Then the trade goes to 12% and you sit there frustrated. I’ve done this more times than I want to admit. The trailing stop is the fix. Set it and let the market decide when you’re done. Manual closes based on “I feel like taking profit” are usually just fear in disguise.

10

DON’T: Hold a Bad Trade Out of Pride

The worst reason to stay in a losing position is “I can’t close it at a loss.” Closing at a loss hurts. Not closing and watching it go to zero hurts more — and it costs more. There is no shame in admitting a trade thesis was wrong and exiting cleanly. The market will present another setup. What it won’t do is give you back the capital you watched bleed out because your ego wouldn’t let you click close.

The stop-loss is supposed to handle this automatically — which is exactly why you set it before entering. If you find yourself overriding your own stop and holding a loser “just to see,” that’s a warning sign worth paying attention to. The ability to close a bad trade quickly and cleanly is one of the most underrated skills in trading.

✅ The 10 Do’s

1. Set a stop-loss before entering — always
2. Use isolated margin by default
3. Check the funding rate first
4. Use limit orders — earn the rebate
5. Know your liquidation price upfront
6. Size by math, not by excitement
7. Put idle USDC in HLP
8. Wait 30 min after a loss
9. Use a trailing stop when winning
10. Judge trades by process, not outcome

❌ The 10 Don’ts

1. Don’t enter without a stop price
2. Don’t use cross margin speculatively
3. Don’t ignore extreme funding rates
4. Don’t pay taker fees unnecessarily
5. Don’t use leverage you can’t survive
6. Don’t trade money you need
7. Don’t leave USDC idle earning 0%
8. Don’t revenge trade after a loss
9. Don’t close winners out of nervousness
10. Don’t hold bad trades out of pride

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